RE L EVANT HEALTH ROUNDTABL E
Representing payers, pharmacies, health plans, and pharma tech, our fantastic line-up of panelists included:
Randy Hanna Vice President, Pharmacy at Blue Cross & Blue Shield (BCBS) of Minnesota
Amy Sayers D irector of Product Management & Business Development at IngenioRx
Brad Fluegel Healthcare Advisor and Former SVP of Walgreens
Stu Libby Chief Executive Officer of Zipdrug
THE PHARMACY OF COVID-19 Operating during COVID-19 was different for all businesses, and pharmacies were no exception. “Pharmacies themselves had to adapt,” Brad said. “They were all open as essential businesses — they were one of the few places that people could actually go to buy products and pick up scripts. They were a pretty important part of the fabric of dealing with the pandemic.” But amidst the worst of the pandemic, not everyone was excited to head out to the pharmacy, especially when the number of cases continued to rise. Suddenly people were frantically looking for alternative ways to get a larger quantity of their prescriptions — such as 90-day supplies through the mail or home delivery. Stu described this frenzy of activities as “doomsday prep.” Payers, pharmacies, and health plans stepped up in a big way to ensure that patients had what they needed to say healthy. “All the pharmacies accelerated their activities … home delivery from store, home delivery from central fill,” Brad said. Randy recalled how the team at BCBS rallied around a single purpose. “As a plan, we had to figure out how we could ensure members could get their medications,” he said. To make this happen, BCBS removed quantity limits, adjusted utilization management programs, and removed prior authorizations on some medications to
limit the amount of paperwork for doctors. They also opened up benefit design to ensure that everyone could get a 90-day supply through the mail or home delivery. “We saw a significant uptake of mail-order utilization,” he said.
I think there’s going to be a multi-module approach in the pharmacy of the future that will involve open-door, brick-and-mortar pharmacies for the foreseeable future,” he said. But that doesn’t mean that in-store pharmacies can go back to business-as- usual as if the pandemic never happened. Instead, according to the panelists, these businesses will need to transform to become more relevant — and there are a few ways that they can do that.
So how did this impact consumers and pharmacies?
The Pharmacy of the Future
“People hoarded their prescriptions in March, but then there was a bit of a gap,” Brad said. “But we came back to a new normal with an elevation of home delivery.” Another thing that helped keep brick-and- mortar pharmacies relevant during the pandemic was the COVID-19 vaccines. As they became available, pharmacies were back on the front line to help get as many people vaccinated as quickly as possible. THE NEED FOR TRANSFORMATION & INNOVATION It’s fair to say that the pandemic highlighted the weaknesses of the current pharmacy model while shedding light on opportunities to become more relevant to consumers. “Many people still enjoy coming in and picking up their drugs and interacting with their pharmacies. They are still filling a billion scripts a year at Walgreens and CVS. So, I think that experience is still important for a lot of people,” Brad said. “Sometimes people want to get their drugs right away and have an interaction with a person, and sometimes they are happy just having those things delivered to their house.
Relevant Health Roundtable The Premier Healthcare Group in the Midwest.
RECLAIMING THE SPACE It’s no secret that drug stores and
pharmacies are under pressure. While stores carry an array of household and convenience products, profit margins are slim since competitors, like Amazon and dollar stores, often underprice these types of products. “This is space that must be monetized,” said Stu. “The real estate was the biggest competitive advantage ten years ago, and today it’s kind of becoming a liability — unless new approaches are embraced.” Pharmacies are certainly trying something new. One strategy is to make pharmacies a destination for healthcare services and support. CVS has HeathHUBs within stores, and Walmart is rolling out freestanding Walmart Health clinics that offer primary care services. Other pharmacies, like Walgreens, are leveraging the expertise of primary care doctors from within the community.
O n the surface, the pharmacy model hasn’t changed much since its introduction in 1752. You meet with a doctor who sends the prescription to the pharmacy, where you then pick it up. It’s an accepted routine and one that went unchallenged for hundreds of years. Then the pandemic hit, forcing consumers to shift their habits — and for pharmacies to adapt quickly. Still, there were plenty of clues — even before lockdown — that the future of the pharmacy was in flux. First, lower profits for brick-and- mortar pharmacies as payments for filling prescriptions continue to shrink.
Second is the increase of online pharmacies and mail-order services – a growing number of alternative medication delivery methods. Now, as we look to the future of pharmacy, it’s clear that consumer preference, pharmacy innovation, and technology disruptions will all play a role. The question is: How can pharmacies innovate to remain profitable and relevant in the consumer’s health care journey?
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Sometimes people want to get their drugs right away and have an interaction with a person, and sometimes they are happy just having those things delivered to their house.”
We tackled this topic in our latest Relevant Health Roundtable.
– BRAD FLUEGEL Healthcare Advisor and Former SVP of Walgreens
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Relevant Health Roundtable | 35
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